American International Group, Inc. (NYSE: AIG) today reported a net loss
of $4.0 billion, or $2.68 per diluted share, for the fourth quarter
ended December 31, 2012, compared with net income of $21.5 billion, or
$11.31 per diluted share, in the prior year quarter. Full year 2012 net
income was $3.4 billion, or $2.04 per diluted share, compared with $20.6
billion, or $11.01 per diluted share, for the full year of 2011.

After-tax operating income in the 2012 fourth quarter was $290 million,
or $0.20 per diluted share, compared with $1.5 billion, or $0.77 per
diluted share, in the prior year quarter. After-tax operating income for
the full year of 2012 was $6.6 billion, or $3.93 per diluted share,
compared with $2.1 billion, or $1.16 per diluted share, in 2011.

Fourth quarter and full year 2012 results included pre-tax catastrophe
losses from Storm Sandy of $2.0 billion ($1.3 billion after-tax). Net
income for the fourth quarter and full year of 2012 included a $4.4
billion net loss on sale from discontinued operations associated with
the agreement to sell International Lease Finance Corporation (ILFC),
which reduced book value per share by $2.97 per share. Net income for
the fourth quarter and full year of 2011 reflected a U.S. consolidated
income tax deferred tax asset valuation allowance release of $19.3
billion and $18.4 billion, respectively.

"AIG's operating profit this quarter shows the power and financial
strength of our diverse global franchise," said Robert H. Benmosche, AIG
President and Chief Executive Officer. "We achieved these operating
profits in spite of Storm Sandy - the second largest single catastrophe
event for AIG in the U.S. These results show how the people of AIG are
working together and getting the job done.

"In so many ways, this was an historic quarter -- from the positive
return we delivered to the American taxpayers on the investment in AIG,
to our ability to monetize non-core assets, and to again becoming a
unified AIG. When history is written, we will look back and see that by
the end of 2012, a new era for AIG had begun. As one AIG, we will expand
on our accomplishments. Teams from our core businesses are working
together, sharing experiences, and providing complementary skill sets to
create new opportunities and better serve our customers. This
partnership is AIG's global foundation for growth."

Mr. Benmosche concluded, "We still have work to do, but we have
confidence in the opportunities we will create in 2013 and beyond. We
remain committed to investing in our business, but expect to take
continued actions to improve our efficiencies through technology and
streamlined work processes."

Liquidity, Capital Management, and Other Significant Developments

AIG shareholders' equity totaled $98.0 billion at December 31, 2012.

During the fourth quarter of 2012, the U.S. Department of the Treasury
(Treasury) completed a registered public offering of its remaining
shares of AIG Common Stock for proceeds of approximately $7.6 billion,
marking the full repayment of America's financial support of AIG.
Since 2008, through asset sales and other actions by AIG, the Federal
Reserve, and Treasury, the U.S. Government recovered its full $182.3
billion commitment to AIG, plus a combined positive return of $22.7
billion. Treasury continues to hold warrants to purchase approximately
2.7 million shares of AIG common stock, the sale of which is expected
to provide an additional positive return to taxpayers.

In December 2012, AIG sold its remaining stake of approximately 1.65
billion ordinary shares of AIA Group Limited (AIA) recognizing gross
proceeds of approximately $6.5 billion and a gain of $240 million. For
the full year, AIG recognized gains of $2.1 billion from AIA.

In December 2012, AIG entered into an agreement to sell up to a 90
percent stake in ILFC to an investor group. The transaction, which is
subject to required regulatory approvals, including all applicable
U.S. and Chinese regulatory reviews and approvals, is expected to
close in the second quarter of 2013. At closing, AIG will retain at
least a 10 percent ownership stake in ILFC subject to dilution for
management issuances (which, over time, would reduce AIG's ownership
by one percentage point).

Distributions from insurance operations totaled $1.4 billion in the
fourth quarter of 2012, and $5.3 billion for the full year of 2012, in
each case excluding a capital contribution to AIG Property Casualty of
$1.0 billion following Storm Sandy.

AIG Parent liquidity sources amounted to $16.1 billion at December 31,
2012, up from $11.6 billion at September 30, 2012, reflecting the sale
of AIA shares.

AFTER-TAX OPERATING INCOME (LOSS)

Three Months Ended

Full-Year Ended

December 31,

December 31,

(in millions)

2012

2011

2012

2011

Insurance Operations

AIG Property Casualty

$

(945

)

$

367

$

1,820

$

1,218

AIG Life and Retirement

1,090

912

4,160

3,277

Mortgage Guaranty (reported in Other)

(45

)

(25

)

9

(97

)

Total Insurance Operations

100

1,254

5,989

4,398

Direct Investment book

509

(27

)

1,215

604

Global Capital Markets

300

46

557

(11

)

Change in fair value of AIA (including realized gains in 2012)

240

1,021

2,069

1,289

Change in fair value of ML III

-

208

2,888

(646

)

Interest expense

(408

)

(364

)

(1,597

)

(1,685

)

Corporate expenses and eliminations

(356

)

(470

)

(1,039

)

(1,410

)

Pre-tax operating income

385

1,668

10,082

2,539

Income tax expense

(87

)

(77

)

(3,187

)

243

Noncontrolling interest - Treasury

-

(96

)

(208

)

(634

)

Other noncontrolling interest

(8

)

(24

)

(52

)

(62

)

After-tax operating income attributable to AIG

$

290

$

1,471

$

6,635

$

2,086

AIG PROPERTY CASUALTY

AIG Property Casualty reported an operating loss of $945 million in the
fourth quarter of 2012, which included $2.0 billion of catastrophe
losses from Storm Sandy, compared to operating income of $367 million in
the fourth quarter of 2011. Excluding catastrophe losses, AIG Property
Casualty's fourth quarter 2012 operating income was $1.0 billion,
reflecting improved underwriting margins and strong investment
performance. AIG Property Casualty continued to shift its mix of
business to higher value products and regions, while benefiting from
positive rate trends.

The fourth quarter 2012 combined ratio was 125.1, compared to 107.1 in
the fourth quarter of 2011. Fourth quarter 2012 results included net
prior year adverse development of $116 million. The accident year loss
ratio, as adjusted, improved to 63.3 from 69.3 in the fourth quarter of
2011 driven by a shift to higher value business and price increases. The
fourth quarter 2012 acquisition ratio was 20.2, a 1.7 point increase
over the fourth quarter of 2011 due to changes in business mix and a
greater emphasis on direct marketing. The fourth quarter 2012 general
operating expense ratio was 17.3, a 3.2 point increase over the fourth
quarter of 2011. Over half of the increase in general operating expenses
was related to investments in strategic initiatives and higher severance
and other personnel costs.

Fourth quarter 2012 net premiums written of $7.8 billion were
essentially unchanged compared to the fourth quarter of 2011. Commercial
Insurance net premiums written in original currencies were flat compared
to the fourth quarter of 2011. Growth in higher value products and
geographies was offset by risk selection initiatives and a new
reinsurance program in U.S. excess casualty. Consumer Insurance net
premiums written in original currencies increased 0.8 percent compared
to the fourth quarter of 2011. Consumer Insurance continued to focus on
growth strategies in its major lines of business, while expanding direct
marketing as part of its multi-distribution channel approach.

Commercial Insurance reported a fourth quarter 2012 operating loss of
$857 million and a combined ratio of 130.4, compared to operating income
of $448 million and a combined ratio of 107.1 in the fourth quarter of
2011. The accident year loss ratio, as adjusted, improved to 66.4 from
76.9 in the fourth quarter of 2011 due primarily to the shift to higher
value business and price increases. The fourth quarter 2012 acquisition
ratio was 15.5, a 0.6 point increase over the fourth quarter of 2011.
The fourth quarter 2012 general operating expense ratio was 14.0, a 2.1
point increase over the fourth quarter of 2011.

Consumer Insurance reported a fourth quarter 2012 operating loss of $286
million and a combined ratio of 111.2, compared to operating income of
$131 million and a combined ratio of 98.8 in the fourth quarter of 2011.
The fourth quarter 2012 accident year loss ratio, as adjusted, was 58.0,
compared to 57.7 in the fourth quarter of 2011. The fourth quarter 2012
acquisition ratio was 26.9, a 3.0 point increase over the fourth quarter
of 2011 due to changes in Consumer Insurance's business mix and
increased investments in direct marketing. The fourth quarter 2012
general operating expense ratio was 16.4, a 0.9 point increase over the
fourth quarter of 2011.

AIG LIFE AND RETIREMENT

AIG Life and Retirement reported operating income of $1.1 billion in the
fourth quarter of 2012, compared to $912 million in the fourth quarter
of 2011 as results were positively impacted by efforts to actively
manage spread income. Results benefited from higher net investment
income, lower interest credited, and lower reserve charges for death
claims compared to the prior year quarter. Partially offsetting these
improvements were a favorable litigation settlement of $226 million in
2011, less favorable equity market performance in the fourth quarter of
2012 compared to the fourth quarter of 2011, loss recognition reserves
of $61 million for a legacy block of long-term care insurance issued
prior to 2002, and less favorable mortality results compared to the
prior year.

Net investment income in the fourth quarter of 2012 was $2.7 billion, a
$343 million increase from the fourth quarter of 2011, principally due
to higher returns on alternative investments and $57 million of fair
value gains on the investment in People's Insurance Company (Group) of
China Limited (PICC). The fourth quarter 2012 base investment yield was
5.33 percent, compared to 5.44 percent in the fourth quarter of 2011,
reflecting lower yields on new purchases due to declining interest rates
along with opportunistic sales of higher yielding securities and higher
credit quality of new purchases. The decline in base investment yield
was more than offset by lower interest crediting rates, which resulted
in improved base net investment spreads for group retirement products
and fixed annuities, compared to the fourth quarter of 2011. Total yield
for the fourth quarter of 2012 was 6.09 percent compared to 5.33 percent
in the fourth quarter of 2011, reflecting higher alternative investment
returns and fair value gains on the PICC investment.

Premiums, deposits, and other considerations totaled $5.2 billion in the
fourth quarter of 2012, compared to $5.9 billion in the fourth quarter
of 2011, principally due to a decline in fixed annuity deposits, as AIG
Life and Retirement continued to maintain pricing discipline in the
current low interest rate environment. Individual variable annuities
showed significant growth over the fourth quarter of 2011, benefiting
from the expansion of the sales organization, attractive product design,
as well as a more favorable competitive environment. Variable annuity
deposits totaled $1.2 billion in the fourth quarter of 2012, a 50
percent increase over the fourth quarter of 2011. Premiums, deposits,
and other considerations in the fourth quarter of 2012 increased by $430
million compared to the third quarter of 2012, principally due to higher
variable annuity and group retirement deposits.

Assets under management were $290.4 billion at the end of the fourth
quarter of 2012, compared to $256.9 billion at the end of the fourth
quarter of 2011, reflecting growth in variable annuities, strong fixed
income and equity markets, and the novation of stable value wrap
business from Global Capital Markets.

AIG Life and Retirement provided $440 million of distributions to AIG
Parent in the fourth quarter of 2012 and $2.9 billion for the full year
2012.

MORTGAGE GUARANTY

Mortgage Guaranty operations reported an operating loss of $45 million
for the fourth quarter of 2012 compared to an operating loss of $25
million in the fourth quarter of 2011. Fourth quarter 2012 results
reflected an increase in first-lien loss reserves offset by favorable
development in other lines. Lengthening foreclosure timelines in certain
states coupled with a reduction in estimated future cures drove the
increase in first-lien loss reserves.

Net premiums written were $236 million for the fourth quarter of 2012,
compared to $200 million for the fourth quarter of 2011. Domestic
first-lien new insurance written totaled $11.6 billion of principal
amount of loans insured for the quarter compared to $7.1 billion for the
same period in 2011. These results were driven primarily by increased
mortgage originations and higher private mortgage penetration in the
fourth quarter of 2012 compared to the comparable quarter of 2011 along
with an expanded Mortgage Guaranty sales force, new lenders, added
distribution channels, and the exit of two competitors in the second
half of 2011. Borrower quality remained high, with an average FICO score
of 758 and an average loan-to-value of 91 percent on new business.

OTHER OPERATIONS

AIG's Other Operations reported fourth quarter 2012 operating income of
$260 million, compared to $502 million in the fourth quarter of 2011.

Conference Call

AIG will host a conference call tomorrow, February 22, 2013, at 8:00
a.m. ET to review these results. The call is open to the public and can
be accessed via a live listen-only webcast at www.aig.com.
A replay will be available after the call at the same location.

###

Additional supplementary financial data is available in the Investor
Information section at www.aig.com.

The conference call (including the conference call presentation
material), the earnings release and the financial supplement may include
projections, goals, assumptions and statements that may constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These projections, goals,
assumptions and statements are not historical facts but instead
represent only our belief regarding future events, many of which, by
their nature, are inherently uncertain and outside our control. These
projections, goals, assumptions and statements include statements
preceded by, followed by or including words such as "believe,"
"anticipate," "expect," "intend," "plan," "view," "target," or
"estimate." These projections, goals, assumptions and statements may
address, among other things: the monetization of our interests in ILFC,
including whether our proposed sale of up to 90 percent of ILFC will be
completed and if completed, the timing and final terms of such sale; our
exposures to subprime mortgages, monoline insurers, the residential and
commercial real estate markets, state and municipal bond issuers and
sovereign bond issuers; our exposure to European governments and
European financial institutions; our strategy for risk management; our
generation of deployable capital; our return on equity and earnings per
share long-term aspirational goals; our strategies to grow net
investment income, efficiently manage capital and reduce expenses; our
strategies for customer retention, growth, product development, market
position, financial results and reserves; and the revenues and combined
ratios of our subsidiaries. It is possible that our actual results and
financial condition will differ, possibly materially, from the results
and financial condition indicated in these projections, goals,
assumptions and statements. Factors that could cause our actual results
to differ, possibly materially, from those in the specific projections,
goals, assumptions and statements include: changes in market conditions;
the occurrence of catastrophic events, both natural and man-made;
significant legal proceedings; the timing and applicable requirements of
any new regulatory framework to which we are subject as a savings and
loan holding company, and if such a determination is made, as a
systemically important financial institution; concentrations in our
investment portfolios; actions by credit rating agencies; judgments
concerning casualty insurance underwriting and insurance liabilities;
judgments concerning the recognition of deferred tax assets; judgments
concerning deferred policy acquisition costs (DAC) recoverability; and
such other factors as are discussed in Part II, Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations
(MD&A) and in Part I, Item IA. Risk Factors in AIG's Annual Report on
Form 10-K for the year ended December 31, 2012. We are not under any
obligation (and expressly disclaim any obligation) to update or alter
any projections, goals, assumptions, or other statements, whether
written or oral, that may be made from time to time, whether as a result
of new information, future events or otherwise.

###

Comment on Regulation G

Throughout this press release, including the financial highlights, we
present our operations in the way we believe will be most meaningful,
representative, and most transparent. That presentation includes the use
of certain non-GAAP financial measures. The reconciliations of such
measures to the most comparable GAAP measures in accordance with
Regulation G are included within the relevant tables.

We believe that After-tax operating income attributable to AIG permits a
better assessment and enhanced understanding of the operating
performance of our businesses by highlighting the results from ongoing
operations and the underlying profitability of our businesses. After-tax
operating income attributable to AIG is derived by excluding the
following items from net income (loss) attributable to AIG: (income)
loss from discontinued operations, net loss (gain) on sale of divested
businesses, income from divested businesses, legacy FIN 48 and other tax
adjustments, legal reserves (settlements) related to "legacy crisis
matters," deferred income tax valuation allowance release, amortization
of the Federal Reserve Bank of New York (FRBNY) prepaid commitment fee
asset, changes in fair value of AIG Life and Retirement fixed income
securities designated to hedge living benefit liabilities, change in
benefit reserves and deferred policy acquisition costs (DAC), value of
business acquired (VOBA), and sales inducement assets (SIA) related to
net realized capital (gains) losses, (gain) loss on extinguishment of
debt, net realized capital (gains) losses and non-qualifying derivative
hedging activities, excluding net realized capital (gains) losses. See
page 10 for the reconciliation of Net income (loss) attributable to AIG
to After-tax operating income attributable to AIG. "Legacy crisis
matters" include favorable and unfavorable settlements related to events
leading up to and resulting from our September 2008 liquidity crisis. It
also includes legal fees incurred by AIG as the plaintiff in connection
with such legal matters.

Although the investment of premiums to generate investment income (or
loss) and realized capital gains or losses is an integral part of both
life and general insurance operations, the determination to realize
capital gains or losses is independent of the insurance underwriting
process. Moreover, under applicable GAAP accounting requirements, losses
can be recorded as the result of other-than-temporary impairments in
value without actual realization. In sum, investment income and realized
capital gains or losses for any particular period are not indicative of
underlying business performance for such period.

Life and retirement services premiums, deposits and other considerations
is a non-GAAP measure which includes life insurance premiums, deposits
on annuity contracts and mutual funds. We use this measure because it is
a standard measure of performance used in the insurance industry and
thus allows for meaningful comparisons with our insurance competitors.

We present the Accident year loss ratio, as adjusted, and Accident year
combined ratio, as adjusted, for our AIG Property Casualty operations.
These ratios exclude catastrophe losses and related reinstatement
premiums, prior year developments, net of premium adjustments and the
impact of reserve discount. Catastrophe losses are generally weather or
seismic events having a net impact on AIG Property Casualty in excess of
$10 million each.

We believe Book Value Per Share, Excluding Accumulated Other
Comprehensive Income is a useful non-GAAP measure for investors because
it eliminates the effect of non-cash items that can fluctuate
significantly from period to period, including changes in fair value of
our available for sale portfolio and foreign translation adjustments.

Additionally, in some cases, revenues and rates of performance are shown
exclusive of partnership income, other enhancements to income and
foreign exchange rates. In all such instances, we believe that excluding
these items permits investors to better assess the operating performance
of each of our underlying businesses by highlighting the results from
ongoing operations and the underlying profitability of its businesses.
We believe that providing information in a non-GAAP manner is more
useful to investors and analysts and more meaningful than the GAAP
presentation. When such measures are disclosed, reconciliations to the
comparable GAAP measure are provided.

###

American International Group, Inc. (AIG) is a leading international
insurance organization serving customers in more than 130 countries and
jurisdictions. AIG companies serve commercial, institutional, and
individual customers through one of the most extensive worldwide
property-casualty networks of any insurer. In addition, AIG companies
are leading providers of life insurance and retirement services in the
United States. AIG common stock is listed on the New York Stock Exchange
and the Tokyo Stock Exchange.

AIG is the marketing name for the worldwide property-casualty, life and
retirement, and general insurance operations of American International
Group, Inc. For additional information, please visit our website at www.aig.com.
All products and services are written or provided by subsidiaries or
affiliates of American International Group, Inc. Products or services
may not be available in all jurisdictions, and coverage is subject to
actual policy language. Non-insurance products and services may be
provided by independent third parties. Certain property-casualty
coverages may be provided by a surplus lines insurer. Surplus lines
insurers do not generally participate in state guaranty funds, and
insureds are therefore not protected by such funds.

American International Group, Inc.

Financial Highlights*

(in millions, except share data)

Three Months Ended December 31,

Twelve Months Ended December 31,

% Inc.

% Inc.

2012

2011

(Dec.)

2012

2011

(Dec.)

AIG Property Casualty Operations:

Net premiums written

$

7,809

$

7,848

(0.5

)

%

$

34,436

$

34,840

(1.2

)

%

Net premiums earned

8,613

8,962

(3.9

)

34,873

35,689

(2.3

)

Claims and claims adjustment expenses incurred

7,545

6,675

13.0

25,785

27,949

(7.7

)

Acquisition expense

1,737

1,657

4.8

6,936

6,464

7.3

General operating expense

1,493

1,266

17.9

5,152

4,406

16.9

Underwriting loss

(2,162

)

(636

)

(239.9

)

(3,000

)

(3,130

)

4.2

Net investment income

1,217

1,003

21.3

4,820

4,348

10.9

Operating income (loss)

(945

)

367

-

1,820

1,218

49.4

Net realized capital gains (losses) (a)

(51

)

454

-

(2

)

607

-

Legal settlements

17

-

-

17

-

-

Other income (loss)

(4

)

(4

)

-

2

(5

)

-

Pre-tax income (loss)

$

(983

)

$

817

-

$

1,837

$

1,820

0.9

Loss ratio

87.6

74.5

73.9

78.3

Acquisition ratio

20.2

18.5

19.9

18.1

General operating expense ratio

17.3

14.1

14.8

12.4

Combined ratio

125.1

107.1

108.6

108.8

AIG Life and Retirement Operations:

Premiums

$

626

$

639

(2.0

)

$

2,428

$

2,513

(3.4

)

Policy fees

735

681

7.9

2,791

2,705

3.2

Net investment income

2,715

2,372

14.5

10,718

9,882

8.5

Other income

9

209

(95.7

)

9

209

(95.7

)

Total revenues

4,085

3,901

4.7

15,946

15,309

4.2

Benefits and expenses

2,995

2,989

0.2

11,786

12,032

(2.0

)

Operating income

1,090

912

19.5

4,160

3,277

26.9

Legal settlements

154

-

-

154

-

-

Changes in fair value of fixed income securities designated to hedge
living benefit

Represents total AIG shareholders' equity, excluding accumulated
other comprehensive income (AOCI) divided by shares outstanding.
Amounts for periods prior to December 31, 2012 have been revised
to reflect reclassification of income taxes from AOCI to
additional paid in capital to correct the presentation of
components of AIG shareholders' equity.

(d)

Computed as Actual or Annualized net income (loss) attributable to
AIG divided by average AIG shareholders' equity. Equity includes
deferred tax assets.